The Integration of Tax Services in Wealth Management: A Growing Trend Among Financial Advisors

Financial planning and tax services have long been seen as separate fields, but a growing trend among wealth management firms is to integrate tax-related services into their offerings. Amy Irvine, the founder of Rooted Planning Group, is one of the pioneers in this movement, having included taxes in her firm’s services from the beginning.

This integration of tax and wealth management services is driving major transactions in the industry, with firms like Choreo acquiring wealth units from accounting firms and private equity-backed companies expanding their reach. The goal is to provide clients with a more comprehensive financial plan that includes tax optimization strategies, ultimately delivering more value back to the client.

Many advisors are recognizing the value of adding tax and estate planning services to their offerings, with a significant percentage already doing so or planning to do so in the near future. By incorporating tax planning into their practices, advisors can help clients save money through smart tax strategies and optimize their investment portfolios.

The shift towards integrating tax services into wealth management practices is not without its challenges. Advisors and CPAs may have differing opinions on certain tax strategies, but collaboration is key to finding the best solutions for clients. Some firms are opting for hybrid approaches, working collaboratively with outside tax preparers or developing their own technology solutions to streamline the tax planning process.

Overall, the trend towards integrating tax services into wealth management practices is driven by a desire to provide clients with a more holistic financial planning experience. By offering tax services alongside traditional wealth management services, firms can enhance the client experience and deliver more value to their clients. As the industry continues to evolve, the outlook for dual practitioners who can offer both wealth and tax services looks promising.